Article Contributed by Beth Brown from our Sibling Employers Association
The 2021 Consolidated Appropriations Act (CAA) created a new prescription drug reporting mandate for all group health plans and health insurers. It requires the reporting of detailed data about prescription drug pricing. The first reports are due to the Centers for Medicare & Medicaid Services (CMS) on December 27, 2022, and must provide information for calendar years 2020 and 2021. The reporting requirement is in addition to the Transparency in Coverage rule that required health plans to provide information on health care costs earlier this year. Beginning with calendar year 2022, the reporting deadline will be June 1 of the following year, so 2023 in this example.
Instead of reporting at the individual plan level, prescription drug information is expected to be reported in aggregate by insurance companies and third-party administrators. Employers rarely have access to the data required to report for their plan(s), since it includes information on a variety of drug-pricing mechanisms, such as rebates, fees, and other remuneration paid by drug manufacturers. However, the CAA rule does not absolve employers from reporting responsibility, so plan sponsors should work with their plan vendors to ensure the reporting is done correctly.
The information will be used by the departments of Labor, Treasury, and Health and Human Services to prepare reports biannually on the costs of drugs. The reports will be publicly available and will look to identify national trends. Since the information will be aggregated, the reports are not likely to be of help to employers as a tool for cost control of their own plan’s drug costs.